| Section | Page | |------------------------------------------------------------------------|------| | Background | 3 | | Employers’ experiences of skill shortages | 8 | | Retention difficulties | 19 | | The internal skills challenge | 24 | | Under-utilisation of skills | 37 | | Employer investment in training and skills | 43 | | High Performance Working Practices and Product Market Strategies | 59 | | Conclusions | 65 | ESS 2015 – overview

91,210 telephone interviews with establishments in the UK 12,614 follow up interviews on training spend

- ESS 2015 is the third time the survey has been run at UK-level
- The 2015 survey covers establishments with 2 or more people working at them
- The 2011 survey included establishments with one employee – these were not covered in 2013 or 2015.
- Where comparisons are made with 2011 or 2013 findings, these are based on re-weighted 2011 data (configured to represent the 2+ employment business population used in 2013 and 2015). Achieved interviews / confidence intervals

‘For a question asked of all respondents where the survey result is 50%, we are 95% confident that the true figure lies within the range 49.68% to 50.32%’

| Population | Number of interviews | (Maximum) Sampling Error | |------------|----------------------|--------------------------| | UK | 1,766,838 | 91,210 +/-0.32 |

By country

| Country | Population | Number of interviews | (Maximum) Sampling Error | |------------------|------------|----------------------|--------------------------| | England | 1,488,171 | 75,129 +/-0.36 | | Northern Ireland | 54,518 | 4,019 +/-1.55 | | Scotland | 142,947 | 6,035 +/-1.26 | | Wales | 81,202 | 6,027 +/-1.26 |

By size of establishment

| Size of establishment | Population | Number of interviews | (Maximum) Sampling Error | |-----------------------|------------|----------------------|--------------------------| | 2-4 | 907,944 | 20,527 +/-0.68 | | 5-24 | 668,618 | 49,584 +/-0.44 | | 25-49 | 101,082 | 11,657 +/-0.91 | | 50-99 | 50,432 | 5,836 +/-1.28 | | 100-249 | 26,900 | 2,689 +/-1.89 | | 250+ | 11,812 | 917 +/-3.24 |

By sector

| Sector | Population | Number of interviews | (Maximum) Sampling Error | |---------------------------------------------|------------|----------------------|--------------------------| | Agriculture | 97,359 | 3,632 +/-1.63 | | Manufacturing | 100,262 | 6,998 +/-1.17 | | Electricity, Gas and Water | 10,151 | 1,041 +/-3.04 | | Construction | 158,790 | 7,474 +/-1.13 | | Wholesale and Retail | 371,231 | 16,126 +/-0.77 | | Hotels & Restaurants | 159,893 | 8,920 +/-1.04 | | Transport and Communications | 128,789 | 8,936 +/-1.04 | | Financial Services | 38,259 | 2,549 +/-1.94 | | Business Services | 363,790 | 13,143 +/-0.85 | | Public Administration | 19,814 | 947 +/-3.18 | | Education | 58,124 | 5,515 +/-1.32 | | Health and Social Work | 132,505 | 8,556 +/-1.06 | | Arts and Other Services | 127,871 | 7,373 +/-1.14 |

Population counts taken from IDBR March 2014 Profile of survey population

Establishments vs. Employment – UK Wide\*

- 2-4: 9% (51%)
- 5-24: 24% (38%)
- 25-49: 6% (12%)
- 50-99: 3% (12%)
- 100+: 2% (42%)

Data taken from ESS 2015 Base: All establishments (91,210)

\*Data based on IDBR March 2014 counts Profile of survey population

Establishments vs. Employment – by country

| Country | Private Sector | 3rd Sector | Public Sector | |---------------|----------------|------------|---------------| | **England** | 86% | 9% | 4% | | **Northern Ireland** | 78% | 14% | 7% | | **Scotland** | 83% | 10% | 7% | | **Wales** | 84% | 8% | 7% |

Base: All establishments: England (75,129), Northern Ireland (4,019), Scotland (6,035), Wales (6,027)

### Key definitions

| Establishment base | Employment base | |--------------------|-----------------| | Proportions are based on the number of establishments, defined here as a single location of an organisation, where at least two people work. | Proportions are based on the total number of employees and working proprietors across establishments. |

| Vacancies | Skill-shortage vacancies | Skills gaps | Under-utilisation | |-----------|--------------------------|-------------|------------------| | Proportion of establishments reporting at least one vacancy | Proportion of establishments reporting at least one skill-shortage vacancy | Proportion of establishments with at least one employee deemed by their employer to be not fully proficient in their role | Proportion of establishments with at least one employee with skills and qualifications more advanced than required for their current job role | | Vacancies as a proportion of all employment | Skill-shortage vacancies as a proportion of all vacancies | The number of staff reported as not fully proficient as a proportion of all employment | The proportion of all staff with skills and qualifications more advanced than required for their current job role | Section 1: Employers’ experiences of skill shortages Incidence and density of vacancies by country

Base: All establishments (2011: UK: 86,522; England: 74,156; NI: 3,921; Scotland: 2,487; Wales: 5,958; 2013: UK: 91,279; England: 75,255; NI: 4,014; Scotland: 6,014; Wales: 5,996; 2015: UK: 91,210; England: 75,129; NI: 4,019; Scotland: 6,035; Wales: 6,027)

### Incidence and density of vacancies by sector

| Sector | Incidence of vacancies | Density (vacancies as % of employment) | Employers with at least one vacancy (2015) | |-------------------------------|------------------------|----------------------------------------|--------------------------------------------| | Education | 29% | 1.8% | 19,100 | | Public Administration | 27% | 2.1% | 6,200 | | Health & Social Work | 23% | 2.4% | 39,200 | | Hotels & Restaurants | 18% | 3.4% | 41,700 | | Arts & Other Services | 16% | 3.2% | 27,900 | | Electricity, Gas & Water | 17% | 3.7% | 2,200 | | Manufacturing | 15% | 2.0% | 19,600 | | Business Services | 15% | 2.1% | 67,800 | | Transport & Comms | 14% | 3.2% | 24,400 | | Financial Services | 17% | 2.6% | 7,000 | | Wholesale & Retail | 17% | 3.4% | 62,800 | | Construction | 12% | 1.9% | 18,700 | | Agriculture | 5% | 1.4% | 5,100 |

Base: All establishments (as shown) Incidence and density of skill-shortage vacancies by country

SSV Density (SSVs as % of Vacs)

| Year | UK | England | N. Ireland | Scotland | Wales | |------|----|---------|------------|----------|-------| | 2011 | 16%| 22% | 23% | 15% | 21% | | 2013 | 22%| 16% | 22% | 19% | 19% | | 2015 | 23%| 23% | 23% | 14% | 14% |

Incidence of establishments with vacancies

Incidence of establishments with skill-shortage vacancies

Base: All establishments (2011: UK: 86,522; England: 74,156; NI: 3,921; Scotland: 2,487; Wales: 5,958; 2013: UK: 91,279; England: 75,255; NI: 4,014; Scotland: 6,014; Wales: 5,996; 2015: UK: 91,210; England: 75,129; NI: 4,019; Scotland: 6,035; Wales: 6,027) Density of skill-shortage vacancies by sector

| Sector | Number of SSVs (2015) | 2015 | 2013 | |-------------------------------|-----------------------|------|------| | Electricity, Gas & Water | (221) | 23% | 23% | | Construction | (1,173) | 23% | 23% | | Transport & Comms | (1,993) | 26% | 31% | | Manufacturing | (1,605) | 26% | 30% | | Business Services | (3,869) | 26% | 28% | | Agriculture | (207) | 22% | 28% | | Financial Services | (472) | 10% | 21% | | Health & Social Work | (3,152) | 21% | 22% | | Arts & Other Services | (2,102) | 21% | 24% | | Wholesale & Retail | (3,753) | 18% | 20% | | Hotels & Restaurants | (3,420) | 19% | 19% | | Education | (2,073) | 16% | 12% | | Public Administration | (276) | 9% | 22% |

Base: All establishments with vacancies (only 2015 shown)

## Density of skill-shortage vacancies by occupation

### Number of SSVs (2015)

| Occupation | 2011 SSVs | 2013 SSVs | 2015 SSVs | |-----------------------------|-----------|-----------|-----------| | Managers | 4,300 | 41,500 | 29,300 | | Professionals | 9,800 | 37,800 | 26,800 | | Associate Professionals | 15,800 | 19,600 | 18,100 | | Admin and Clerical | 2011: (987) | 2013: (1,168) | 2015: (1,335) | | Skilled trades | 2011: (3,179) | 2013: (3,406) | 2015: (3,401) | | Caring, leisure et al | 2011: (2,648) | 2013: (2,760) | 2015: (2,321) | | Sales and Cust. Service | 2011: (2,219) | 2013: (2,600) | 2015: (3,814) | | Machine Operatives | 2011: (2,556) | 2013: (2,232) | 2015: (4,309) | | Elementary | 2011: (2,275) | 2013: (2,578) | 2015: (2,971) |

Base: All establishments with vacancies in each occupation (as shown) Density of skills-shortage vacancies by occupation and sector

- **Electricity, Gas & Water**: 35% (221)
- **Construction**: 35% (1,173)
- **Transport, Storage & Comms**: 31% (1,993)
- **Manufacturing**: 30% (1,605)
- **Business Services**: 26% (3,859)
- **Agriculture**: 22% (207)
- **Health & Social Work**: 21% (3,152)
- **Arts & Other Services**: 21% (2,102)
- **Financial Services**: 21% (472)
- **Wholesale & Retail**: 20% (3,753)
- **Hotels & Restaurants**: 19% (3,420)
- **Education**: 16% (2,073)
- **Public Admin**: 9% (276)

Base: All establishments with vacancies within each occupation by sector

- **Skilled Trades occupations**: 51%
- **Clerical staff**: 52%
- **Associate Professionals**: 41%
- **Professionals**: 37%
- **Administrative**: 38%
- **Skilled Trades and Other Services**: 44%
- **Caring, Leisure and Other Services**: 42%
- **Sales and Customer Services**: 53%
- **Machine Operatives**: 55%
- **Elementary staff**: 53%
- **Managers**: 36%
- **Manufacturing**: 36%
- **Transport & Comms**: 35%
- **Construction**: 32%
- **Electricity, Gas & Water**: 35%
- **Transport & Comms**: 35%

Legend:

- **= SSV density 30% or above**

- **= SSV density between 15% and 29%**

- **= SSV density between 1% and 14%** Technical and practical skills lacking among applicants

- **Specialist skills needed for the role**: 64%

- **Solving complex problems**: 39%

- **Knowledge of how the organisation works**: 37%

- **Knowledge of the organisation's products and services**: 31%

- **Complex numerical skills**: 29%

- **Reading and understanding instructions, guidelines etc.**: 26%

- **Writing instructions, guideline etc.**: 25%

- **Basic numerical skills**: 24%

- **Basic IT skills**: 22%

- **Advanced IT skills**: 22%

- **Adapting to new equipment**: 20%

- **Foreign language skills**: 15%

- **Manual dexterity**: 15%

Base: All with skill-shortage vacancies that received the new lists of skills descriptors (3,244) People and personal skills lacking among applicants

- Ability to manage and prioritise own tasks: 47%
- Customer handling skills: 39%
- Team working: 33%
- Managing their own feelings, or those of others: 32%
- Persuading or influencing others: 31%
- Managing or motivating other staff: 30%
- Sales skills: 25%
- Setting objectives for others and planning resources: 21%
- Instructing, teaching or training people: 22%
- Making speeches or presentations: 16%

Base: All with skill-shortage vacancies that received the new lists of skills descriptors (3,244) Impact of skill-shortage vacancies

Base (2013/2015): All establishments with hard-to-fill vacancies that are all as a result of skill shortages (4,675 / 6,469)

- Any impact: 94% (2015) vs 84% (2013)
- Increase workload for other staff: 84% (2015) vs 49% (2013)
- Have difficulties meeting customer services objectives: 49% (2015) vs 42% (2013)
- Lose business or orders to competitors: 42% (2015) vs 44% (2013)
- Experience increased operating costs: 42% (2015) vs 40% (2013)
- Delay developing new products or services: 40% (2015) vs 35% (2013)
- Have difficulties meeting quality standards: 35% (2015) vs 37% (2013)
- Have difficulties introducing new working practices: 35% (2015) vs 30% (2013)
- Outsource work: 29% (2013) vs 24% (2015)
- Withdraw from offering certain products or services altogether: 24% (2015) vs 24% (2013)
- Have difficulties introducing technological change: 21% (2013) vs 23% (2015)

Base (2013/2015): All establishments with hard-to-fill vacancies that are all as a result of skill shortages (4,675 / 6,469) Action taken to fill skill-shortage vacancies

- Increasing advertising/recruitment spend: 39% (2015) vs. 37% (2013)
- Using new recruitment methods: 32% (2015) vs. 34% (2013)
- Redefining existing jobs: 12% (2015) vs. 13% (2013)
- Increasing/expanding trainee programmes: 10% (2015) vs. 7% (2013)
- Using contractors/contracting out: 8% (2015) vs. 7% (2013)
- Increasing training to existing workforce: 8% (2015) vs. 7% (2013)
- Preparing to offer training to those less well qualified: 6% (2015) vs. 6% (2013)
- Increasing salaries: 5% (2015) vs. 4% (2013)
- Recruiting workers who are non-UK nationals: 3% (2015) vs. 4% (2013)
- Making the job more attractive: 2% (2015) vs. 1% (2013)
- Other: 3% (2015) vs. 5% (2013)
- No action taken: 15% (2015) vs. 13% (2013)

Base (2013 / 2015): All with hard-to-fill vacancies (6,133 / 9,223) Section 2: Retention difficulties Incidence of retention difficulties – by country and size

8% of establishments reported retention difficulties

Size

Base: All establishments in Module 2: England (37,792), N. Ireland (2,014), Scotland (3,031), Wales (2,981)

Base: All establishments in Module 2: 2-4 (10,339), 5-24 (24,835), 25-49 (5,907), 50-99 (2,950), 100-249 (1,332), 250+ (455) Incidence of retention difficulties by sector

| Sector | Incidence | Base: All establishments in Module 2 (as shown) | |-------------------------------|-----------|-----------------------------------------------| | Hotels & Restaurants | 14% | (4,530) | | Public Admin | 13% | (459) | | Education | 11% | (2,808) | | Health & Social Work | 11% | (4,189) | | Arts & Other Services | 10% | (3,713) | | Electricity, Gas & Water | 10% | (514) | | Manufacturing | 9% | (3,477) | | Transport & Comms | 9% | (4,501) | | Business Services | 7% | (6,629) | | Agriculture | 7% | (1,853) | | Construction | 6% | (3,713) | | Wholesale & Retail | 6% | (8,164) | | Financial Services | 6% | (1,268) | Occupation most affected by retention difficulties

- Managers: 2%
- Professionals: 11%
- Associate Professionals: 10%
- Admin / clerical: 4%
- Skilled Trade: 21%
- Caring / leisure / service: 13%
- Sales / customer service: 9%
- Machine Ops: 8%
- Elementary: 19%

Base: All establishments with retention difficulties (4,924) Reasons why it is difficult to retain staff

- Not enough people interested in doing this type of work: 56%
- Too much competition from other employers: 38%
- Wages offered are lower than those offered by other...: 34%
- Long/unsocial hours: 33%
- Lack of career progression: 30%
- Staff don't want long term commitment: 30%
- Geographic location of the site: 26%
- Impact of the benefits trap: 23%
- Unattractive conditions of employment: 20%
- Difficult to find experienced/skilled staff: 9%
- Nature of work is too difficult/mentally and physically tiring: 4%
- Cost to employer: 2%
- Students come and go: 1%
- Other: 3%

Base: All establishments experiencing retention difficulties (Module 2: 4,924) Section 3: The internal skills challenge Incidence and density of skills gaps by country

UK

- Incidence of skills gaps: 17%, 15%, 14%
- Density (% of all staff with a skills gap): 5.5%, 5.2%, 5.0%

England

- Incidence of skills gaps: 17%, 15%, 14%
- Density (% of all staff with a skills gap): 5.6%, 5.1%, 5.1%

N. Ireland

- Incidence of skills gaps: 13%, 14%, 9%
- Density (% of all staff with a skills gap): 4.4%, 5.2%, 3.3%

Scotland

- Incidence of skills gaps: 21%, 19%, 14%
- Density (% of all staff with a skills gap): 5.2%, 5.9%, 5.0%

Wales

- Incidence of skills gaps: 16%, 16%, 14%
- Density (% of all staff with a skills gap): 4.6%, 5.8%, 4.5%

Base: All establishments (2011: UK: 86,522; England: 74,156; NI: 3,921; Scotland: 2,487; Wales: 5,958; 2013: UK: 91,279; England: 75,255; NI: 4,014; Scotland: 6,014; Wales: 5,996; 2015: UK: 91,210; England: 75,129; NI: 4,019; Scotland: 6,035; Wales: 6,027) Incidence and density of skills gaps by establishment size

| Establishment Size | Incidence of Skills Gaps | Density (% of all staff with a skills gap) | |--------------------|--------------------------|------------------------------------------| | 2 to 4 | 8% | 3.6% | | 5 to 24 | 7% | 2.9% | | 25 to 49 | 6% | 2.6% | | 50 to 99 | 5.5% | 5.1% | | 100 to 249 | 4.5% | 4.3% | | 250+ | 4.5% | 4.3% |

Base: All establishments (as shown) Incidence and density of skills gaps by sector

| Sector | Incidence of skills gaps | Density (% of all staff with a skills gap) | Number of skills gaps (2015) | |-------------------------------|--------------------------|-------------------------------------------|------------------------------| | Public Admin | 23% | 4.8% | (942) | | Hotels & Restaurants | 21% | 6.4% | (8,888) | | Education | 19% | 7.2% | (5,796) | | Manufacturing | 18% | 5.9% | (7,560) | | Wholesale & Retail | 17% | 5.4% | (17,287) | | Financial Services | 16% | 3.7% | (2,330) | | Health & Social Work | 16% | 4.0% | (8,460) | | Electricity, Gas & Water | 15% | 3.2% | (1,148) | | Transport & Comms | 14% | 4.9% | (6,890) | | Business Services | 13% | 4.4% | (14,011) | | Arts & Other Services | 12% | 5.2% | (7,373) | | Construction | 11% | 3.8% | (7,202) | | Agriculture | 9% | 4.4% | (3,407) |

Base: All establishments (as shown) Skills gaps density by occupation

| Occupation | 2013 | 2015 | |-----------------------------|------|------| | UK Overall | 5.2% | 5.0% | | Managers | 3.0% | 2.7% | | Professionals | 3.8% | 3.0% | | Associate Professionals | 5.3% | 5.3% | | Admin and Clerical | 4.9% | 5.4% | | Skilled trades | 5.5% | 5.5% | | Caring, leisure et al | 4.8% | 4.1% | | Sales and Cust. Service | 7.8% | 6.5% | | Machine Operatives | 7.0% | 7.3% | | Elementary | 6.9% | |

Number of skills gaps (2015)

| Occupation | 2013 | 2015 | |-----------------------------|------|------| | UK Overall | 1.4m | 129,400 | | Managers | 102,100 | 88,300 | | Professionals | 187,000 | 108,100 | | Associate Professionals | 119,400 | 228,400 | | Admin and Clerical | 161,700 | 161,700 | | Skilled trades | 255,800 | 255,800 | | Caring, leisure et al | 14,059 | 14,059 | | Sales and Cust. Service | 14,105 | 14,105 | | Machine Operatives | 32,192 | 32,192 | | Elementary | 31,970 | 31,970 |

Base: All establishments with staff in each occupation (as shown) Density of skills gaps by occupation and sector

- Hotels & Restaurants: 7.2%
- Manufacturing: 7.2%
- Public Administration: 6.4%
- Wholesale & Retail: 5.4%
- Business Services: 5.2%
- Transport & Comms: 4.9%
- Electricity, Gas & Water: 4.9%
- Education: 4.0%
- Construction: 3.8%
- Arts & Other Services: 3.7%
- Financial Services: 3.7%
- Health & Social Work: 3.2%
- Agriculture: 2.9%

Base: All establishments (92,210) Main causes of skills gaps

- Staff are new to the role: 60% (2015), 62% (2013)
- Their training is currently only partially completed: 56% (2015), 57% (2013)
- Staff lack motivation: 34% (2015), 42% (2013)
- They have had training but their performance has not improved sufficiently: 29% (2015), 39% (2013)
- The introduction of new working practices: 28% (2015), 32% (2013)
- Staff have not received the appropriate training: 26% (2015), 29% (2013)
- Unable to recruit staff with the required skills: 26% (2015), 29% (2013)
- The introduction of new technology: 20% (2015), 20% (2013)
- The development of new products and services: 19% (2015), 21% (2013)
- Problems retaining staff: 18% (2015), 18% (2013)
- New to the role/ training not complete (transient): 73% (2015), 75% (2013)
- Transient skill gaps only: 21% (2015), 17% (2013)

Base (2013/2015): All establishments with skills gaps - up to 2 occupations followed up (20,228 / 18,265)

Figures are shown as a percentage of all gaps (not a percentage of all establishments) Impact of skills gaps by establishment size

Staff not fully proficient has a **minor** impact on establishment performance

Staff not fully proficient has a **major** impact on establishment performance

| Establishment Size | Minor Impact | Major Impact | |--------------------|--------------|--------------| | UK Overall | 48% | 17% | | 2 to 4 | 45% | 23% | | 5 to 24 | 48% | 16% | | 25 to 49 | 49% | 16% | | 50 to 99 | 51% | 14% | | 100 to 249 | 58% | 14% | | 250+ | 54% | 17% |

Base: All with skills gaps (as shown) Impact of skills gaps

- Increased workload for other staff: 52%
- Have higher operating costs: 27%
- Have difficulties meeting quality standards: 25%
- Have difficulties introducing new working practices: 24%
- Lose business or order to competitors: 21%
- Delay developing new products or services: 17%
- Outsource work: 11%
- No impact: 34%

Base: All establishments with skills gaps (18,265) Technical and practical skills that need improving among staff with skills gaps

- Specialist skills needed for the role: 48%
- Solving complex problems: 39%
- Knowledge of the organisation's products and services: 37%
- Knowledge of how the organisation works: 36%
- Adapting to new equipment: 32%
- Basic IT skills: 30%
- Reading and understanding instructions, guidelines etc: 29%
- Advanced IT skills: 27%
- Complex numerical skills: 24%
- Writing instructions, guideline etc.: 22%
- Basic numerical skills: 20%
- Manual dexterity: 14%
- Foreign language skills: 13%

Base: All with skills gaps followed up with the new lists of skills descriptors (9,119) People and personal skills that need improving among staff with skills gaps

- Ability to manage and prioritise own tasks: 59%
- Team working: 56%
- Customer handling skills: 46%
- Managing their own feelings, or those of others: 46%
- Managing or motivating other staff: 41%
- Persuading or influencing others: 39%
- Setting objectives for others and planning resources: 30%
- Instructing, teaching or training people: 28%
- Sales skills: 23%
- Making speeches or presentations: 17%

Base: All with skills gaps followed up with the new lists of skills descriptors (9,119) Action taken to overcome skills gaps

- Increase training activity / spend or increase / expand trainee programmes: 68% (2015), 68% (2013)
- More supervision of staff: 56% (2015), 60% (2013)
- More staff appraisals / performance reviews: 46% (2015), 51% (2013)
- Implementation of mentoring / buddying scheme: 45% (2015), 47% (2013)
- Reallocating work: 33% (2015), 37% (2013)
- Changing work practices: 27% (2015), 31% (2013)
- Increase recruitment activity / spend: 19% (2015), 16% (2013)
- Recruiting workers who are non-UK nationals: 10% (2015), 10% (2013)
- Nothing: 16% (2015), 15% (2013)

Base (2013 / 2015): All establishments with skills gaps (20,228 / 18,265) Changes in density of SSVs and skills gaps over time

% Change in SSVs since 2013 % Change in Skills Gaps since 2013

| Industry | 2013: | 2015: | |---------------------------|-------|-------| | Construction | (7,202) | (7,474) | | Financial Services | (2,330) | (2,549) | | Transport & Comms | (6,890) | (8,936) | | Wholesale & Retail | (17,287) | (16,126) | | Education | (5,796) | (5,515) | | Electricity, Gas & Water | (1,148) | (1,041) | | Hotels & Restaurants | (8,888) | (8,920) | | Agriculture | (3,407) | (3,632) | | Health & Social Work | (8,460) | (8,556) | | Manufacturing | (8,556) | (6,998) | | Business Services | (14,011) | (13,143) | | Arts & Other Services | (7,358) | (7,373) | | Public Admin | (942) | (947) |

Base: All establishments (as shown) Section 4: Under-utilisation Incidence and density of skills under-utilisation by country and size

- **UK**: 30% incidence, 7.1% density (91,210 establishments)
- **England**: 30% incidence, 7.0% density (75,129 establishments)
- **N. Ireland**: 28% incidence, 7.8% density (4,019 establishments)
- **Scotland**: 32% incidence, 7.9% density (6,035 establishments)
- **Wales**: 34% incidence, 7.5% density (6,027 establishments)

Base: All establishments (as shown) Incidence and density of skills under-utilisation by establishment size

| Establishment Size | Incidence of under-utilisation | Skills under-utilisation density | |--------------------|-------------------------------|----------------------------------| | 2-4 (20,527) | 29% | 16.6% | | 5-24 (49,584) | 30% | 8.9% | | 25-49 (11,657) | 34% | 6.4% | | 50-99 (5,836) | 35% | 5.6% | | 100-249 (2,689) | 34% | 5.0% | | 250+ (917) | 35% | 4.8% |

Base: All establishments (as shown) Incidence and density of skills under-utilisation by sector

| Sector | Incidence of under-utilisation | Skills under-utilisation density | |-------------------------------|-------------------------------|---------------------------------| | Hotels & Restaurants | 40% | 13.0% | | Education | 37% | 5.8% | | Public Admin. | 36% | 5.9% | | Health & Social Work | 36% | 6.2% | | Arts and Other Services | 35% | 10.7% | | Wholesale & Retail | 31% | 8.4% | | Financial Services | 30% | 6.8% | | Electricity, Gas & Water | 27% | 3.8% | | Transport & Comms | 27% | 7.1% | | Business Services | 26% | 6.8% | | Construction | 25% | 6.6% | | Manufacturing | 24% | 3.2% | | Agriculture | 20% | 8.6% |

Base: All establishments (as shown) Occupations where under-utilisation is most prevalent

- 37% Managers
- 9% Elementary staff
- 2% Machine operatives
- 9% Sales and customer services
- 7% Caring, leisure and other
- 6% Skilled trade occupations
- 14% Admin. / clerical staff
- 8% Associate Professionals
- 7% Professionals

Base: All establishments with under-utilised staff (28,159) Reasons why staff are working in roles for which they have excess qualifications and skills

- They are not interested in taking on higher level role: 26%
- Working hours suit them better: 15%
- Lack of jobs in desired higher level role: 11%
- To gain experience / current role is lower level in same industry as desired higher level role: 10%
- They own the business / are a partner in the business: 8%
- Temporary role / stop gap: 7%
- Attractive conditions of employment: 7%
- Competition for higher level roles / struggling to get higher level job: 4%
- Actively seek staff with quals / skills beyond needs: 4%
- Family-run business: 4%
- Qualifications / skills not relevant to job role: 3%
- They have more than one job: 1%
- Not particular reason / it just happened: 10%

Base: All establishments with under-utilised staff (28,159) Section 5: Employer investment in training and skills Proportion of employers providing training in the last 12 months by country

- **England**: 66% (Train), 48% (Train off-the-job), 17% (Train on-the-job only)
- **Northern Ireland**: 62% (Train), 47% (Train off-the-job), 15% (Train on-the-job only)
- **Scotland**: 71% (Train), 52% (Train off-the-job), 20% (Train on-the-job only)
- **Wales**: 63% (Train), 49% (Train off-the-job), 14% (Train on-the-job only)

Base: All establishments (as shown) Proportion of employers providing training in the last 12 months by size

- **Train**
- **Train off-the-job**
- **Train on-the-job**
- **Train on-the-job only**

| Size | Train | Train off-the-job | Train on-the-job | Train on-the-job only | |------------|-------|-------------------|------------------|-----------------------| | 2-4 | 51% | 35% | 16% | 16% | | 5-24 | 78% | 58% | 64% | 20% | | 25-49 | 92% | 76% | 83% | 16% | | 50-99 | 95% | 82% | 88% | 13% | | 100-249 | 96% | 85% | 91% | 11% | | 250+ | 97% | 86% | 92% | 11% |

Base: All establishments (as shown) Proportion of employers providing training in the last 12 months by sector

| Sector | Train | Train off-the-job | Train on-the-job | Train on-the-job only | |-------------------------------|-------|-------------------|------------------|-----------------------| | Education | 93% | 82% | 74% | 11% | | Public Admin. | 90% | 78% | 72% | 16% | | Health & Social Work | 88% | 74% | 61% | 16% | | Electricity, Gas & Water | 74% | 64% | 53% | 13% | | Financial Services | 74% | 58% | 53% | 18% | | Arts and Other Services | 70% | 58% | 51% | 17% | | Business Services | 68% | 53% | 51% | 17% | | Manufacturing | 63% | 53% | 50% | 17% | | Hotels & Restaurants | 63% | 52% | 46% | 23% | | Transport and Comms | 62% | 48% | 44% | 21% | | Wholesale & Retail | 60% | 48% | 44% | 17% | | Construction | 57% | 46% | 46% | 11% | | Agriculture | 50% | 41% | 41% | 9% |

Base: All establishments (as shown) Training Equilibrium: employers’ interest in providing more training than they were able to

66% of all employers train

Among those who train

46% Wanted to train more 51% Do sufficient training 2% Wanted to train

Among those who don’t train

30% Wanted to train 70% Did not want to train

42% of employers want to train more 58% of employers in training equilibrium (no desire to increase training)

*Note training employers responding ‘Don’t know’ have been included in the group ‘Wanted to undertake more training’ on final measure* Types of Training and Workforce Development provided

- Job specific training: 85%
- Health and safety / first aid training: 75%
- Basic induction: 66%
- Training in new technology: 49%
- More extensive induction: 37%
- Management training: 37%
- Supervisory training: 36%

Any induction: 68%

Base (2013/2015): All establishments that train (69,842/69,541) Proportion of staff trained by country

Total number of staff trained

| Country | 2011 | 2013 | 2015 | |-----------|------|------|------| | UK | 14.7m| 16.8m| 17.4m| | England | 12.3m| 14.1m| 14.7m| | N. Ireland| 0.4m | 0.4m | 0.5m | | Scotland | 1.4m | 1.5m | 1.5m | | Wales | 0.7m | 0.7m | 0.8m |

| Country | 2013: | 2015: | |-----------|-------|-------| | UK | (91,279) | (91,210) | | England | (72,255) | (75,129) | | N. Ireland| (4,014) | (4,019) | | Scotland | (6,014) | (6,035) | | Wales | (5,996) | (6,027) |

Base: All establishments (as shown) Proportion of staff trained by size

| Size | 2011 | 2013 | 2015 | |-------|------|------|------| | 2-4 | 43% | 41% | 43% | | 5-24 | 56% | 54% | 56% | | 25-49 | 65% | 63% | 65% | | 50-99 | 66% | 66% | 66% | | 100-249 | 67% | 68% | 67% | | 250+ | 70% | 71% | 70% |

Base: All establishments (as shown) Staff trained by sector

- **Agriculture**: 39% (2011), 41% (2013), 40% (2015)
- **Manufacturing**: 46% (2011), 52% (2013), 55% (2015)
- **Electricity, Gas & Water**: 50% (2011), 55% (2013), 58% (2015)
- **Construction**: 49% (2011), 48% (2013), 53% (2015)
- **Wholesale & Retail**: 52% (2011), 55% (2013), 55% (2015)
- **Hotels & Restaurants**: 55% (2011), 59% (2013), 64% (2015)
- **Transport & Comms**: 44% (2011), 56% (2013), 55% (2015)
- **Financial Services**: 59% (2011), 59% (2013), 67% (2015)
- **Business Services**: 52% (2011), 60% (2013), 60% (2015)
- **Public Admin**: 60% (2011), 61% (2013), 67% (2015)
- **Education**: 65% (2011), 66% (2013), 66% (2015)
- **Health & Social Work**: 74% (2011), 76% (2013), 75% (2015)
- **Arts & Other Services**: 80% (2011), 78% (2013), 78% (2015)

Base: All establishments (as shown) Proportion of staff trained by occupation

| Occupation | 2011 | 2013 | 2015 | |-----------------------------------|------|------|------| | Managers | 47% | 50% | 48% | | Professionals | 65% | 65% | 62% | | Assoc. Professionals | 59% | 52% | 52% | | Admin / clerical | 47% | 56% | 58% | | Skilled Trades | 60% | 60% | 58% | | Caring, Leisure, Other services | 73% | 80% | 80% | | Sales & Customer service | 57% | 63% | 66% | | Machine operatives | 48% | 57% | 54% | | Elementary | 49% | 55% | 56% |

Base: All establishments with staff in each occupation (as shown)

## Training Days

| | Days per person trained | Total training days | 2015 as a % of 2013 | |----------------|-------------------------|---------------------|---------------------| | | 2011 | 2013 | 2015 | 2011 | 2013 | 2015 | | **UK** | | | | | | | | | 7.8 | 6.7 | 6.8 | 115m | 113m | 118m | | | (66,916) | (69,842) | (69,541) | | | +4.1% | | **England** | | | | | | | | | 7.9 | 6.7 | 6.8 | 97m | 95m | 100m | | | (57,117) | (57,787) | (57,422) | | | +5.2% | | **Northern Ireland** | | | | | | | | | 6.3 | 6.3 | 5.6 | 3m | 3m | 3m | | | (2,941) | (2,894) | (2,869) | | | -3.7% | | **Scotland** | | | | | | | | | 7.3 | 6.7 | 6.7 | 10m | 10m | 10m | | | (2,177) | (4,884) | (4,894) | | | -1.5% | | **Wales** | | | | | | | | | 7.5 | 7.7 | 7.2 | 5m | 6m | 5m | | | (4,681) | (4,277) | (4,356) | | | -2.3% |

*Base: All establishments (as shown)* Reasons for not providing any training

- All staff are fully proficient / no need for training: 68%
- Training not considered a priority: 7%
- No money available for training: 7%
- No training available in relevant subject area: 5%
- Any staff training arranged AND funded elsewhere: 4%
- Learn by experience/Learn as you go: 3%
- Managers lack time to organise training: 2%
- Employees too busy to undertake training: 2%
- Employees too busy to give training: 2%
- Training not needed due to size of establishment: 1%
- External courses are too expensive: 1%
- Trained staff will be poached by other employers: 1%
- Business not operating long enough: 1%
- Courses interested in are not available locally: 1%
- Other: 4%

Base: All establishments that do not provide training (excluding DK) (20,719) Reasons for not providing further training

- Lack of funds for training: 52%
- Unable to spare more staff time: 49%
- Hard to find time to organise training: 14%
- A lack of appropriate training / qualifications: 5%
- Difficulty finding flexible training providers: 4%
- Staff not keen: 4%
- Staff now fully proficient: 2%
- Lack of good local training providers: 2%
- Lack of provision (e.g. courses full): 2%
- Lack of knowledge about training opportunities: 2%
- Decisions taken at head office: 1%
- Staff turnover: 1%
- Training not a management priority: 1%
- Other: 1%

Base: All establishments who would have provided more training in the past 12 months if they could (33,281)

## Training and Workforce Development - Summary

| UK figures | 2011 | 2013 | 2015 | |------------------------------------------------|-------|-------|-------| | % of employers that train | 65% | 66% | 66% | | % of employers that train off-the-job | 47% | 49% | 49% | | % that only train on-the-job | 19% | 17% | 17% | | % of staff trained over the last 12 months | 55% | 62% | 63% | | Days training per person trained | 7.8 days | 6.7 days | 6.8 days | | Total training days provided | 115m | 113m | 118m |

Base (2011/2013/2015): All establishments (86,522 / 91,279 / 91,210)

## Investment in training

| | 2011 | 2013 | 2015 | |--------------------------------|------------|------------|------------| | **Unweighted Base:** | (11,027) | (12,522) | (12,614) | | | £bn | % | £bn | % | £bn | % | | **Total training expenditure** | £43.8bn | 100 | £43.0bn | 100 | £45.4bn | 100 | | **Off-the-job training: total**| £21.1bn | 48 | £21.3bn | 50 | £22.9bn | 50 | | **Off-the-job training: Course-related: total** | £17.6bn | 40 | £17.9bn | 42 | £19.7bn | 43 | | Trainee labour costs | £4.7bn | 11 | £5.2bn | 12 | £5.4bn | 12 | | Fees to external providers | £2.7bn | 6 | £2.4bn | 6 | £2.2bn | 5 | | On-site training centre | £2.9bn | 7 | £2.7bn | 6 | £3.0bn | 7 | | Off-site training centre (in the same company) | £0.6bn | 1 | £0.5bn | 1 | £0.7bn | 2 | | Training management | £6.1bn | 14 | £6.5bn | 15 | £7.7bn | 17 | | Non-training centre equipment and materials | £0.4bn | 1 | £0.4bn | 1 | £0.4bn | 1 | | Travel and subsistence | £0.4bn | 1 | £0.4bn | 1 | £0.4bn | 1 | | Levies minus grants | -£0.3bn | -1 | -£0.2bn | -\* | -£0.2bn | -\* | | **Off-the-job training: other (seminars, workshops etc.): total** | £3.5bn | 8 | £3.4bn | 8 | £3.2bn | 7 | | Trainee labour costs | £2.5bn | 6 | £2.5bn | 6 | £2.3bn | 5 | | Fees to external providers | £1.0bn | 2 | £0.9bn | 2 | £0.8bn | 2 | | **On-the-job training: Total** | £22.7bn | 52 | £21.7bn | 50 | £22.6bn | 50 | | Trainee labour costs | £14.2bn | 32 | £14.0bn | 33 | £13.9bn | 31 | | Trainers' labour costs | £8.6bn | 20 | £7.7bn | 18 | £8.7bn | 19 |

*Base: All establishments that train (Investment in Training follow up survey, as shown)* Training expenditure by size

- **Total training expenditure (£bn)**

  - 2011: 43.8
  - 2013: 43.0
  - 2015: 45.4

- **Spend per person trained**

  - 2011: £5,700
  - 2013: £2,560
  - 2015: £2,610

- **Spend per employee**

  - 2011: £5,650
  - 2013: £5,810
  - 2015: £3,570

- **Base:** All establishments that train (Investment in Training follow up survey; as shown)

______________________________________________________________________

**UK**

- **2 to 4**

  - 2011: £2,290
  - 2013: £2,610
  - 2015: £5,700

- **5 to 24**

  - 2011: £3,570
  - 2013: £3,630
  - 2015: £5,810

- **25 to 49**

  - 2011: £3,100
  - 2013: £3,080
  - 2015: £3,100

- **50 to 99**

  - 2011: £2,810
  - 2013: £2,740
  - 2015: £2,460

- **100+**

  - 2011: £2,290
  - 2013: £2,320
  - 2015: £2,470

______________________________________________________________________

**2011:**

- 2 to 4: £1,640
- 5 to 24: £3,570
- 25 to 49: £3,100
- 50 to 99: £2,810
- 100+: £2,290

**2013:**

- 2 to 4: £1,600
- 5 to 24: £3,630
- 25 to 49: £3,080
- 50 to 99: £2,740
- 100+: £2,320

**2015:**

- 2 to 4: £5,700
- 5 to 24: £5,810
- 25 to 49: £3,100
- 50 to 99: £2,460
- 100+: £2,470

______________________________________________________________________

**Base:** All establishments that train (Investment in Training follow up survey; as shown) Section 6: High Performance Working practices and Product Market Strategies Overlap between High Performance Working employers and those that adopt High/Very High Product Market Strategies

- All private sector employers: 1,514,000
- HPW only: 54,000
- HPW & PMS: 108,000
- High/Very High PMS only: 595,000

Base: All private sector establishments (75,639) Characteristics of HPW employers

HPW employers are more active in the recruitment market and find it easier to fill their vacancies…

…yet are more likely to have skills gaps among their workforce…

…and are much more likely to train their staff…

Base for all charts: All establishments in Module 1 by HPW classification (HPW: 8,792; non-HPW: 36,600) Product Market Strategy

Overall composite Product Market Strategy scores

| Aggregate PMS score | % of private sector UK establishments | % of private sector UK employment | |---------------------|---------------------------------------|----------------------------------| | Very low (1 to 7) | 4 | 2 | | Low (8 to 10) | 13 | 9 | | Medium (11 to 13) | 25 | 22 | | High (14 to 16) | 29 | 31 | | Very high (17 to 20)| 16 | 22 |

Base: All establishments in the private sector (75,639) Characteristics of High PMS employers

- Incidence of vacancies
- Incidence of HtFVs
- Incidence of SSVs
- HtFVs as % of vacs

Base: All establishments in the private sector, in each PMS group Characteristics of High PMS employers

Base: All establishments in the private sector, in each PMS group

| PMS Group | Incidence of training | Proportion of staff trained | |--------------------|-----------------------|----------------------------| | Very low PMS | 46% | 47% | | Low PMS | 57% | 49% | | Medium PMS | 63% | 54% | | High PMS | 68% | 61% | | Very high PMS | 71% | 64% |

Base: (2,673) (8,771) (18,544) (22,832) (13,385) Section 7: Conclusions Developments in the UK economy and the changing nature of work

• The UK has witnessed job creation at a faster rate than any other EU country over the last 2 years. Reflecting this growth, there has been a steep rise in vacancy levels among employers - from 655,000 vacancies at the time of the survey in 2013 to 927,000 in 2015. • Approaching a quarter (23 per cent) of these vacancies were due to applicants lacking the requisite skills. • However, this growth has been accompanied by stalling productivity levels - the number of skills gaps among existing staff has remained relatively stable, at 1.4 million employees (5.0% of the total workforce). • The nature of work is evolving at a rapid rate - new technology is driving change in the workplace, with complex analytical skills and basic IT skills lacking in a number of applicants and existing staff. • The survey also highlights the ongoing challenge of soft, people and personal skills, in particular time management and prioritisation of tasks. This points to the growing complexity of job roles, across all occupations, requiring individuals to juggle multiple strands of work and responsibility. • Employers are responding through training, with increased use of e-learning, but there is clear demand for training that is geared more specifically to the requirements of an evolving workplace. Leadership and management

• Just over a third of training employers (37%) were investing in the skills of their Managers through the provision of management training.

• Businesses do not face particular difficulties in retaining management talent but it is the occupational grouping whose skills are most likely to be under-used.

• The survey provides a number of further indications that improving management practice should be a priority for UK business. • Management and leadership type skills (managing and motivating other staff, setting objectives/planning resources) accounted for over half of all skills gaps (58%) identified

• Good leadership could in particular serve to support growth among small businesses, where the presence of poor managerial practices is more common. • Only one in eight of all businesses with fewer than 5 employees had arranged management training in the last 12 months. There is clearly more work to be done to ensure that small businesses have the support they need improve their managerial practices. Skills for a productive workforce

• Two in five establishments with skill-shortage vacancies reported a delay in developing new products or services and 35% reported difficulties in innovating working practices. • These impacts were reported less frequently for skills gaps (though were still cited by 17% and 24% respectively of establishments with skills gaps), perhaps reflecting the occupations in which skill-shortage vacancies and skills gaps are most likely to arise.

• Skills that are required to drive forward innovation within businesses often appear to be lacking: • Two in five of all skill-shortage vacancies and skills gaps were attributed to individuals lacking the ability to solve complex problems. Within existing staff, this was particularly apparent for those in high-skill occupations, such as Managers and Professionals.

• Just over one in ten employers (12%) were operating HPW practices and identified a clear benefit associated with the adoption of HPW, in that these employers were better able to fill their vacancies. For more information contact UKCES Employer Surveys

0207 227 7800

Employer.surveys@ukces.org.uk

@ukces